Bank profitability and the business cycle

Ugo Albertazzi and Leonardo Gambacorta

No 601, Temi di discussione (Economic working papers) from Bank of Italy, Economic Research and International Relations Area

Abstract: An important element of the macro-prudential analysis is the study of the link between business cycle fluctuations and banking sector profitability and how this link is affected by institutional and structural characteristics. This work estimates a set of equations for net interest income, non-interest income, operating costs, provisions, and profit before taxes, for banks in the main industrialized countries and evaluates the effects on banking profitability of shocks to both macroeconomic and financial factors. Distinguishing mainly the euro area from Anglo-Saxon countries, the analysis also identifies differences in the resilience of the respective banking systems and relates them to the characteristics of their financial structure.

Keywords: bank profitability; economic cycle; macro-prudential analysis (search for similar items in EconPapers)
JEL-codes: C53 G21 (search for similar items in EconPapers)
Date: 2006-09
New Economics Papers: this item is included in nep-ban, nep-bec, nep-eec, nep-fdg, nep-fin, nep-fmk and nep-mac
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Citations: View citations in EconPapers (29)

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Related works:
Journal Article: Bank profitability and the business cycle (2009)
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Persistent link: https://EconPapers.repec.org/RePEc:bdi:wptemi:td_601_06

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